Buyers: NFL Ad Sales Look Strong

Lower pricing gains in sight as nets battle each other to keep share

By John Consoli

Despite lingering concerns about the impact of last season’s ratings declines and some recent advertiser defections, the NFL’s four major TV network partners have sold upwards of $2.2 billion of commercial time for the upcoming regular season. And money is still in play with deals getting done.

While the total take is down about 10% from the approximate and record-setting $2.5 billion they took in at this point heading into last season, it’s still a solid number considering all the negatives they have had to sell against, including competing for sports ad dollars with both the Winter Olympics and the World Cup that will be televised in early and mid-2018, respectively.

“You still can’t get the mass reach you get with the NFL anywhere else,” said one media buyer, echoing the thoughts of others. “We still see value in the NFL and believe in it as an ad vehicle and so do our clients. Whether to spend on the NFL has not been an issue for most of our clients. They’re back in.”

Selling in the wake of last season’s ratings declines did mean the networks had to go into the marketplace asking for lower cost-per-thousand price increases than they charged heading into last season.

NBC last year did deals in the 8% to 10% CPM increase range and this year the deals overall were more in the 6% CPM increase range, buyers said. Other networks did deals in the 4% to 5% CPM increase range, buyers interviewed for this article said.

NBC also used its Super Bowl telecast this upcoming season to help sell its regular NFL season inventory and also sold packages involving regular season NFL and Olympics commercial time, along with NFL combined with its highest-rated primetime shows.

“All the networks were more aggressive this season,” said one media buyer, with several clients in the NFL telecasts. “NBC was particularly aggressive. In the past they set prices and would not budge. They drew a line in the sand and were willing to turn NFL upfront business away. This year wasn’t the case.”

Another buyer commenting on all the networks’ sales tactics said, “We saw NFL deals this year that we haven’t seen in 10 years.”

Dan Lovinger, executive VP, ad sales for NBCUniversal Sports Group, agreed that his network took an aggressive strategy: “We had some mild concern after the ratings declines last season so we decided to start selling earlier than usual. We started talking with advertisers in February and by March we were doing deals.”

Lovinger said NBC not only sold its NFL inventory as part of packages with its other sports properties, but it also sold packages involving the NFL and NBC primetime entertainment programming.

“We were less stringent about pricing and CPM price increases and less about ‘take it or leave it’ and more about motivating through ad packages," he said. "A package that includes Thursday night and Sunday night NFL with The Voice and This is Us is a pretty strong package. We were selling that for the first time.”

All of the networks took hefty ad hits when the two major erectile dysfunction drugs, Viagra and Cialis, which spent close to $100 million on NFL advertising last season, lost their exclusivity patents and decided not to continue advertising this season. Some automakers, including Nissan and Chrysler also cut back on NFL spending this year, as did Microsoft. Subway was the one incumbent quick-service restaurant chain to pull out of the NFL so far this season.

Networks have had to deal with losses in other years, also. Last year, heading into the season, online fantasy gaming sites Draft Kings and Fan Duel pulled out after spending a combined $150 million on NFL advertising in 2015.

Lovinger said NBC made it a point to target as much new business as possible and it worked.

“Every year you have advertiser churn for whatever reason, so you always need to create new business," he said. "We went after new clients aggressively and took in more than $90 million in new NFL advertising.”

Lovinger would not elaborate on who the new clients were but he said they were in categories like retail, beverages, quick service restaurants, distilled spirits and some new prescription drug advertisers.

“Amazon is forcing its retail competitors to be more aggressive with their marketing,” one network executive said. “So we saw an increase in NFL spending by retailers for this season.”

The exec also said packaged goods giant Procter & Gamble returned to the NFL with more ad dollars this season. “That all helped make up for the loss of Viagra and Cialis dollars,” the exec explained.

With so much NFL on the air, the viewer dynamics are a bit different for each network’s telecasts. Therefore, some advertisers that have cut back on some of the networks’ telecasts have actually increased spending on others.

Eric Johnson, executive VP of global ad revenue and sales at ESPN, said auto advertising on the network’s Monday Night Football is strong and up this season. That’s counter to some of the other networks.

Acknowledging that ESPN has less inventory to sell than the other NFL partner networks, Johnson said, “There’s been extremely healthy demand for NFL advertising and we are confident that by the start of the season, our sales level will be consistent with what it was last year.”

Johnson said ESPN sells the NFL as part of its “ESPN Live Strategy” that includes both linear and all the digital platforms, including its streaming telecasts. He added, “We are no longer just selling set-top box NFL ratings. We sell streaming viewership and out-of-home and that helps boost ratings. We are capturing audiences where they watch the NFL on ESPN platforms and that has resonated with buyers.”

Fox has also been selling the NFL a bit differently to advertisers. “We’ve taken a look at how we can more effectively sell the NFL and are finding new ways to sell our female NFL audience,” said Neal Mulcahy, executive VP, sales, at Fox Sports Media Group. “Our data shows a sizable precentage of the women who watch the NFL on Fox are not regular watchers of primetime entertainment television. So advertisers can target this harder to reach audience on our NFL telecasts.”

John Bogusz, executive VP of sports sales and marketing at CBS, said NFL ad dollars are still coming in. “We are selling a bit later this year but money is still working.”

He said while auto spending is down, along with the loss of Viagra and Cialis ad dollars, the retail, insurance and packaged goods categories are up, and other drugs came in to replace the erectile dysfunction duo.

Recognizing the ratings problems early last season, the NFL is hoping to remedy that by scheduling more big name matchups early-on. Marketers have noticed and responded.

Many of the buying agencies and network executives believe that a large chunk of those ratings declines early-on last season were due to the presidential election campaign.

While some may scoff at that, look at some of the data. On the night of one national presidential debate held on a Monday last season, ESPN’s ratings took a 40% hit in viewership. On the night of a Sunday debate, a game between two prominent NFL teams—the New York Giants and Green Bay Packers—saw ratings decline by 15%. There are other examples throughout the first few months of the season that coincided with the presidential campaign and all sorts of nightly news programming.

Before the Nov. 8 election, viewership of NFL games over the first nine weeks of the season was down 14% compared to 2015. In the final eight weeks of the season, viewership declined only 1%.

“The NFL was cognizant of the ratings problems last year and overloaded the first six weeks of this season’s schedule with great matchups to get the ratings off to a solid start,” one buyer said.

Advertisers choosing to sit out the NFL season or to delay locking dollars in anticipation of more ratings declines and lower scatter ad prices are taking a gamble.

If the presidential campaign distractions and poor early season matchups last season were the cause of the slow start, and those situations don’t exist this year, some of the extra inventory the networks didn’t sell in the upfront could cost way more in scatter if ratings take off from the opening game kickoff.

Some news accounts have denigrated the Thursday night NFL telecasts on CBS and Fox, pointing out they are rated much lower than the Sunday afternoon or Sunday night telecasts. That resulted in softer advertiser interest and pricing.

Media buyers know, though, that even with their lower ratings, Thursday night NFL ratings still tower over virtually every other show on in TV primetime.

Based on the 2016-2017 season ratings, in the C3 18-49 demo, the NBC Thursday Night Football telecasts averaged a 5.1, second highest 18-49 demo rating of any broadcast show for the season (behind No. 1 NBC Sunday Night Football with a 6.5.). The CBS Thursday Night Football telecasts averaged a 4.7 to place third. The next highest was CBS sitcom The Big Bang Theory, which averaged a 3.3. And only eight broadcast primetime programs out of more than 200 averaged over a 2.0 in the 18-49 demo for the season.

The same basic order holds true among the 18-34 demo. So even if fewer people are watching the NFL telecasts on Thursday nights, there are still more viewers watching football than anything else.

As for primetime viewers, NBC Sunday Night Football may have been down last season, but it still was the most-watched program on television, averaging 19.18 million viewers. NBC Thursday Night Football was next with 16.6 million viewers and CBS Thursday Night Football was third with 14.2 million. The only broadcast entertainment show averaging more viewers than football was CBS drama NCIS, which averaged 14.5 million.

The primetime NFL telecasts on NBC and CBS also draw large numbers of women both in the 18-49 and 25-54 demos. Again among women 18-49, Sunday Night Football averaged a 4.6 rating, NBC Thursday Night Football a 3.6 and CBS Thursday Night Football a 3.3. That ranks them first, fourth and seventh among all broadcast primetime programming in the demo.

More 18-49 year old women only watched NBC’s This is Us and Fox’s Empire versus NFL football in primetime. And the numbers are similar in the 25-54 female demo.

CBS’ Bogusz said, “There’s the NFL and everything else. It’s not even close. With the NFL’s 18-49 rating dramatically higher versus any other show on television with few exceptions.”

What could also be a shot in the arm for the networks is that fourth quarter entertainment programming was heavily sold in the upfront, so advertisers that need to reach audiences and get ratings points may need to turn to the primetime and Sunday NFL telecasts.

“We see a strong scatter market for the NFL,” said NBC’s Lovinger. “And we’re sitting in a good place.”